Sales: $5.3 billion
Key Personnel: Suh Kyungbae, chairman and chief executive officer; Bae Donghyun, president and chief executive officer.
Major Products: Skin Care—Sulwhasoo, Laneige, Mamonde, Innisfree, Hera, Iope, Happy Bath, Primera, Odyssey, Illi, Lirikos, Aestura, Makeon; Cosmetics—Etude, Hanyul, Espoir, Aritaum; Fragrance—Annick Goutal; Inner Beauty—Vital Beauty; Hair Care—Ryo, Mise-en-Scéne; Oral Care—Median.
New Products: Sulwhasoo First Care Activating Mask, Timetreasure Renovating Eye Serum, and Concentrated Ginseng Renewing Water; Hera Black Cushion; Primera Soothing sensitive line; Iope Derma repair line; Laneige Layering Cover Cushion; Innisfree White Peony Tone-up Cream; Etude Any Cushion All Day Perfect, Soonjung, Fix&Fix Primer, Color in Liquid Lips; Etude Color Factory.
Comments: After years and years of year-on-year growth, sales fell 10% last year. To right the ship, the company is pursuing an aggressive overseas expansion plan. That makes sense considering Amorepacific’s domestic sales fell 16%, due to declines in the number of Chinese tourists and declining sales in duty-free channels and retail stores in tourist areas. CEO Suh Kyungbae blamed the domestic decline on economic recession and changing consumer environment. However, international sales rose 10%.
Sales of Innisfree fell 1% due to declines in tourism; but the brand increased the number of Green Lounges and VR zones, places where customers can experience the brands and the products. Etude sales fell 18% and AP blamed that decline on fewer tourists, too. To buck the trend, the brand opened a new flagship store and launched Color Factory, a personalized color service. Among smaller brands, sales of Espoir fell 14%, but sales of Aestura increased 10%, thanks to “robust” sales of medical beauty products such as Atobarrier and Regedermrx. Sales of Amos Professional products increased 5%.
For the first quarter of 2018, sales fell 10% too, although online sales grew, especially through direct-owned online malls, thanks to specialized digital marketing efforts and the launch of online-only products. Looking outside Korea, the company said it accelerated its global expansion with a focus on its five key brands (Sulwhasoo, Laneige, Mamonde, Innisfree and Etude House). For example, AP entered Australia via the launch of Laneige in Sephora, Mamonde entered the US through its debut in Ulta, Innisfree opened its first store in Japan, Etude House expanded into the Middle East and Hera entered Singapore. The strategy is working. Sales in Asia rose 7% helped by several new product launches such as Innisfree’s local launch of White Peony Tone-Up cream in China. In North America, sales surged more than 30% due to the launch of Laneige in Sephora, but sales in Europe dropped 54% when the Lolita Lempicka license expired.